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The name of the region come from the Slavic word 'bara', which means 'marsh', 'bog', thus the name of Baranya means 'marshland'. Even today large parts of the region are swamps, such as the natural reservation Kopački Rit in its southeast. Another theory states that the name of the region come from the Hungarian word 'bárány', which means 'lamb'.

The region of Baranya was settled by the Slavs in the 6th century, and in the 9th century, it was part of the Slavic Balaton Principality. Hungarians arrived to the area in the 9th century, and Baranya county arose as one of the first comitatus of the Kingdom of Hungary, in the 11th century. This county included not only present-day region of Baranya, but also one part of present-day Slavonia, on the southern side of the river Drava.

In 1918, the entire region was captured by Serbian troops and was administered by the newly created Kingdom of Serbs, Croats and Slovenes (later known as Yugoslavia). For a short time (in 1918-1919), Baranya was part of Banat, Bačka and Baranja region, which was governed by the People's Administration from Novi Sad. By the Treaty of Trianon (part of the Versailles peace) in 1920, the Baranya region was formally divided between Hungary and the Yugoslavia, but de facto remained under the administration of the latter until 1921. On August 14, 1921, the Serb-Hungarian Baranya-Baja Republic was proclaimed. It included northern parts of Baranya and Bačka regions, which were assigned to Hungary by the treaty. On August 21–25, 1921, the Republic was abolished and its territory was included into Hungary, as was previously decided by the Treaty of Trianon. The northern part of Baranya in Hungary was included into Baranya county.

Baranya is divided between Hungary and Croatia with the majority of the region lying in Hungary. The Hungarian portion of the region coextensive with Baranya County, while in Croatia, it comprises only part of Osijek-Baranja County. Contemporary Hungarian usage of Baranya usually refers only to the Hungarian section while the terms Drávaköz and Drávaszög ("Drava corner") are used for Croatian Baranja.

The main settlement in Croatian Baranja is Beli Manastir with a population of 8,671 (2001 census). Most of the municipalities in Croatian Baranja have a Croat ethnic majority. The municipality of Jagodnjak has a Serb ethnic majority and the municipality of Kneževi Vinogradi has a Hungarian relative majority.